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Brokers no longer allowed to sign rental contracts

Brokers no longer allowed to sign rental contracts

Dubai: Brokers legally appointed to manage property of landlords based abroad are no longer allowed to sign unified lease contracts to get an Ejari, leaving some tenants in the lurch, Gulf News has learnt.

The Dubai Land Department (DLD) in March launched the unified lease contract for rental properties in Dubai to create a transparent and professional real estate market with measurable standards.

The new form aims to regulate relationships between all parties involved in real estate transactions in order to guarantee their rights, the DLD said in March.

The signatures of the lessor and the tenant, along with two witnesses, are required for the new contract.

Previously, if the property owner is based abroad, he or she may appoint a legal representative through a power of attorney (POA) to manage his or properties here. But the DLD is no longer honouring all POAs.

Owner’s signature must

If the legal representative, for example, is an independent broker with a real estate visa, the DLD will not honour the POA and will require the original lease contract to be signed directly by the property owner.

“As for leasing brokers, they are not entitled to sign contracts or receive money for the units they mediate in their leasing operations.

The adoption of these procedures helps ensure the rights of all parties and minimise the possibility of any problems arising,” Mohammad Yahya, deputy executive director of Rental Affairs Sector at the DLD, told Gulf News.

Property management firms

Yahya also said owners may appoint DLD-licensed property management companies.

There are eight such companies listed on the DLD’s website (www.dubailand.gov.ae).

“All DLD-licensed property management companies have the power to sign contracts and receive amounts for the units they manage,” he said.

“However, we advise all owners to verify the licences of the companies they deal with before signing property management contracts.”

Yahya said the new decision aims to organise the market and make sure that experts are there to manage the real estate market.

Brokers with POAs, however, said they now have to send the unified lease contract via courier to owners who cannot come to Dubai to sign new POAs, creating a backlog.

“The DLD banned our real estate POAs. They now need original signature. We are affected. I lost a lot, about a hundred POAs, for nothing and the property owners who are in the US, the UK, Pakistan, India are not able to fly [immediately] to Dubai to make a new POA,” said a real estate broker.

“Even my wife gave me a POA to go and transact on her behalf with the DLD or Rera (Real Estate Regulatory Agency), but I’m not able,” said the broker, who requested anonymity.

The Pakistani broker said the problem started in October.

“We send around 30 contracts via courier per month to get the original signatures. Now, depending on the owner, that could delay the whole process by four to 10 days.

“If the owner is busy and can’t attend to the document, it could take longer. Or if the DLD sees a slight signature mismatch, we’d have to do the whole process again,” he said.

New tenants are the ones who get affected the most, a real estate broker in International City said.

“I have five clients who until now cannot get an Ejari. One of them cannot move in to a new apartment because he can’t get an Ejari. Without an Ejari, he cannot get his water and electricity connection as it’s now a requirement,” the agent said.

Both brokers said they understand that the new system aims to protect all parties. They, however, suggested to have a secure online system where unified lease contracts electronically signed by property owners abroad be set up for everyone’s convenience.

How to apply for Ejari

For tenants whose landlords are in the UAE:

Get the accomplished unified lease contract from your landlord (signed both by the tenant and the landlord), which can be downloaded from Ejari’s website (www.ejari.ae) or from the DLD’s smart app.

Go to the typing centres or real estate services trustees listed on the Ejari Website. Apply and pay.

For those whose landlords are not based in the UAE and have legally designated a representative through a power of attorney:

Same process applies, but documents will vary. Bring a copy of the POA plus the passport and visa page of the legal representative. Make sure the legal representative does not have a real estate broker visa.

Others who want the unified lease contract to be signed by the owner himself, send the original contract to the owner via courier and get a copy of his passport (make sure his signature is visible).